International Union of Operating Engineers, Local 793 v. Employer Bargaining Agency and Williams Contracting Ltd.

[1980] OLRB Rep. January 121

0863-79-M International Union of Operating Engineers, Local 793, Applicant, v. Employer Bargaining Agency and Williams Contracting Ltd., Respondents.

BEFORE: R.O. MacDowell, Vice-Chairman and Board Members C.A. Ballentine and H.J.F. Ade

APPEARANCES: S.B.D. Wahl and E.A. Ford for the applicant; W.J. McNaughton and W. Kutynec for the respondents.

DECISION OF THE BOARD; January 3, 1980.

1. This is an application under section 112a of The Labour Relations Act. That sec­tion provides as follows:

"(1) Notwithstanding the grievance and arbitration provisions in a collective agreement or deemed to be included in a collective agreement under section 37, a party to a collective agreement be­tween an employer or employers' organization and a trade union or council of trade unions may refer a grievance concerning the in­terpretation, application, administration or alleged violation of the agreement, including any question as to whether a matter is arbitrable, to the Board for final and binding determination."

2. The section 112a reference was filed on August 9, 1979 and involves a grievance which was delivered to the respondent employer on or about June 11, 1979 and was not ami­cably resolved by a meeting of the parties, held on June21, 1979. A hearing date was sched­uled for August 24, 1979 but was adjourned sine die on the consent of the parties. The mat­ter came on again for hearing on November 5, 1979. The Board was in receipt of a letter from counsel for the Labour Relations Bureau of the Ontario General Contractors' Associ­ation advising that, although named as a respondent, this employer bargaining agency did not intend to take any part in the proceedings. Despite this letter notice was, in fact, sent to both named respondents. The respondent Williams Contracting Limited ("Williams") is represented by the same firm of solicitors as the employer bargaining agency.

3. At the opening of the hearing counsel for Williams raised certain preliminary objections to the: Board proceeding on that day. It was argued that the documents before the Board were deficient in not highlighting the nature of the dispute concerning the interpretation of the agreement. Counsel contended that the employer bargaining agency might have chosen not to appear in ignorance of the true nature of the referral and that, accordingly, the Board should adjourn to give a further notice to this employer association. Since the em­ployer association had, in fact, received proper notice of the November 5th hearing, and had chosen not to attend, the Board was not prepared to accede to counsel's request for a further adjournment. Apart altogether from the fact that both named respondents were repre­sented by the same firm of solicitors, the Form 7 notice specifically warns that if a party fails to attend at the hearing, the Board may proceed in its absence.

4. Counsel for Williams also argued that the nature of the respondent's "defence" necessitated giving notice to certain other parties who might be affected by the Board's deci­sion. The applicant union bases its claim on a province-wide collective agreement with the respondent bargaining agency which, for the sake of convenience, we shall refer to as the "excavation agreement." It is alleged that Williams was bound by that agreement, and had failed to apply it in respect of certain work on construction sites in which it was engaged. Counsel for Williams advised the Board that he intended to argue that Williams was bound by another collective agreement (the "road builders' agreement") with the applicant trade union, that the work in question fell within the terms of that agreement, and that the em­ployer has been properly complying therewith. The "excavation" and "road builders"' agreements, ii: was argued, were closely interrelated. Each applied to certain work done by operating engineers, and each established wage rates and other terms and conditions upon which that work would be done. In deciding that certain job functions fell within the scope of the "excavation" agreement, counsel argued that the Board might, ipso facto, be determining that those functions were not "road-building" under the "road builders"' agree­ment. This, it was said, gave the employers engaged in road building, their employer associ­ation and, possibly, certain trade unions representing their employees, an interest in the outcome of the present proceedings and a legal right to notice thereof so that they could be present and make their submissions. It was admitted that none of these entities were parties to, or bound by, the agreement presently before us nor, in the case of the allegedly inter­ested trade unions, is there any evidence that such unions represent any of the employees covered by the excavation agreement. None of them have had any actual notice of these proceedings. Although Paragraph 3 of Form 81 requires the respondent to list the names of other interested parties so they may be given such notice in advance of the hearing (and, as has already been mentioned, this matter has been outstanding for some time,) Williams did not file its reply until the very day of the hearing and made no effort to contact any of these allegedly interested parties — even the association of which it now claims to be a member.

5. The union contended that section 112a is a quasi contractual proceeding in which the only interested parties are those actually bound by the agreement in question. The union denies that any other party would have an interest in law or status to intervene in the pro­ceeding, and argued that the Board should not entertain amicus curiae submissions in cases such as this. The union pointed to the importance of the expeditious resolution of applica­tions under section 112a, and the complexity, delay and prejudice which would inevitably arise if interests as remote as those relied on here were sufficient to establish a right to no­tice. The union was also concerned that these "interests" had only been disclosed at the hearing when they could easily have been raised earlier. The union denies that it had any contractual relations with Williams for "road building work" and put the company to the strict proof of any such agreement and to its membership in the Road Builders Employer Association. In the circumstances the Board considered it appropriate to hear the employ­er's evidence concerning its membership in the Road Builders Association and the exist­ence, if any, of a collective agreement between it and the trade union respecting road build­ing work. Such relationship might well be relevant to our determination of the employer's preliminary motion.

6. The Metro Toronto Road Builders Association is an unaccredited employer or­ganization. The Road Builders Agreement was signed July 28, 1978 and has an effective term from July 10, 1978 to April 30,1980. At the time this agreement was entered into, Wil­liams Contracting was not a member of the Association. Mr. W. Kutynec, an officer of the employer, testified that he decided to seek membership in the Road Builders Association in the summer of 1978 after speaking to certain other contractors with whom he was working on a local railway project. Mr. Kutynec hoped to take advantage of the lower wage rates payable for road building work - a kind of work in which he believed himself to be engaged. The trade union advised him that, in order to be covered by the Road Building agreement for road building work he would have to join the Metropolitan Toronto Road Builders Association ("MTRBA").

7. Two letters filed with the Board over the signature of S.E. Dinsdale, as solicitor for the MTRBA, advising the Labourers' International Union, Local 183, the applicant herein, that as of January 4th, 1979 Williams Contracting had become a member in good standing of the Association. These documents are, of course, written hearsay and neither Mr. Dinsdale nor any official of the MTRBA gave evidence concerning the membership of Williams Contracting in the Association. Mr. Kutynec may have believed himself to be a member but the evidence concerning his actual membership is lacking. There was also filed with the Board a letter purportedly from an official of the Labourers' union addressed to the MTRBA acknowledging Williams' membership and agreeing to be bound by the terms of the Road Builders agreement in so far as Williams was concerned. This letter is also hearsay but, more significantly, there is no such equivalent document emanating from the Interna­tional Union of Operating Engineers, Local 793. It is not disputed that there is no letter, communication or any other written document emanating from the Operating Engineers, and directed to either the MRTBA or Williams, indicating that the union agrees to the ap­plication of the Road Building agreement to it members employed by Williams to do road building work. Whatever may be said of the evidence linking Williams to the MTRBA, there is nothing linking the union to the MTRBA agreement in so far as that agreement ap­plies to Williams and its employees. There is nothing before the Board to indicate that the union has bound itself contractually to Williams with respect to road building work.

8. Mr. Kutynec testified that he had unilaterally applied the terms of the Road Build­ing agreement to what he considered to be road building work. He also testified that certain sums were remitted to Employee Benefit Plan Consultants Limited, the actuaries and ad­ministrators of the IOUE, Local 793, pension and welfare fund. These sums, it was alleged, were calculated with reference to the Road Builders agreement; and it was suggested that this was consistent with the conclusion that Williams was bound by the agreement.

9. On cross-examination, however, Mr. Kutynec admitted that he was not really fa­miliar with the matter, since the calculations and deductions were made by his bookkeeper and clerical staff. Since he did not prepare the remittance forms himself he was unable to ex­plain certain apparent inconsistencies which were brought to his attention in cross-examina­tion. In the circumstances, therefore, we are able to give little weight to his evidence. In any event, there was no evidence that any trade union offical was actually aware of these pay­ments into the trust fund and, in so far as the road builders wage rates was concerned, the present application was made because the union believed that the rates being paid should have been, and were not, in accordance with the excavator's agreement. Indeed, although we do not rest our decision on this basis, Williams did not establish that the road building agreement was, in fact, a collective agreement. None of the signatories thereto were called to identify or prove the document.

10. Having regard to the totality of the evidence we are not satisfied that Williams has proved that it is a member of the Association or, even if it is' that membership per se is suffi­cient here to establish a contractual relationship with the union. As the Board has often not­ed, it is commc'n in the construction industry for employers to honour the terms of a collec­tive agreement as a matter of grace, and not because of any legal obligation. Such employers, although not formally bound by the collective agreement, frequently employ union members under the same terms and conditions, without any intention of thereby con­ferring bargaining rights on the union. Likewise, trade unions in such circumstances some­times refrain from applying to the Board to be certified as the legal bargaining agent of the employees, even if such employees are union members (see Ecodyne Ltd., [1979] OLRB Rep. July 629 and, more recently, Metrus Contracting Ltd., Board File No. 1590-78-M — de­cision released October 1st, 1979, as yet unreported) In Hacquoil Construction [1963] OLRB Rep. June 143 the Board commented:

"It has also been the view of the Board that a unilateral adoption of an agreement by a person not a party to it does not constitute a collective agreement within the meaning of The Labour Relations Act between such person and one or other of the parties to the collective agreement. See the Canada Machinery Corporation Limited case, supra. As the Board said in the Foundation Company of Canada case, 55 CLLC ¶16,078, 'there must be something more — something evidencing an agreement between that person and one of the parties to the existing agreement.' As we have already stated, the Board requires such evi­dence to be in writing and to be executed or signed by the parties to the agreement. Accordingly, we are also of the opinion that the mere ob­servance of the provisions of the 'McLeod' and 'Exchange' agreements, whether by Hacquoil's or by Hacquoil's Construction Co. or by Hac­quoil Construction Limited, does not constitute a collective agreement between the union and Hacquoil Construction Limited."

In the present case we are not satisfied that the union and the employer are bound by the road builders agreement nor is there any estoppel operating against the union preventing it from asserting this position. This, however, is not the end of the matter.

11. The construction industry has a unique industrial relations environment. The in­dustry functions through a system involving owners, entrepreneurs, general contractors, management companies, subcontractors or trade contractors, employees and unions — all bound together in a web of contractual and business relationships. A system such as this re­quires interdependence and a close co-ordination of complementary job functions. Inevi­tably there will be some overlap, particularly since trade unions are organized on a craft ba­sis and the lines between crafts have become increasingly blurred. As a result, collective agreements not only regulate complementary work functions but also, frequently, purport to distribute the same work to different groups of employees. The resulting jurisdictional dispute, if not resolved by the parties themselves, can be resolved by the Board under sec­tion 81 of The Labour Relations Act. Section 123 of the Act also reflects the interdepen­dence of employers in the construction industry and the inevitable "spill over" affect of in­dustrial conflict on a construction site. Section 123 allows "interested persons" to seek relief before the Labour Relations Board in the event that they are adversely affected by unlawful industrial conflict between other employers and their employees. Such provision for "inter­ested persons" is significantly missing from section 82 of the Act — the industrial equivalent to section 123. Finally, mention might be made of the prevalence in the construction indus­try of employer associations (a fact recognized by the wording of section 112 which contem­plates multi-party agreements) and the recently passed Bill 22 which envisages province-wide bargaining between craft unions and broadly based employer associations. The scheme of the Act does recognize, therefore, that in some circumstances, persons who are strangers to the immediate employer-employee relationship will have an interest in a proceeding be­fore the Board, and may have a right to intervene in such proceeding. The respondent ar­gues that, in view of the unique environment of the construction industry, the Board should give notice to, and entertain the submissions, of any interested party — even though the basis of that interest may only be in the commercial or incidental effect of the Board's ultimate de­cision.

12. We accept the respondent's contention that collective bargaining relationships in the construction industry are interrelated and that employers and trade unions will be interested in, and perhaps affected by, the negotiating or interpretation of collective agreements other than those to which they are immediate parties. However, we do not accept that such "third parties 'are entitled, as of right, to intervene in proceedings under section 112a, (see: Napev Construction Ltd., [1976] OLRB Rep. Mar. 109; application for judicial review dis­missed sub nomine; Bricklayers, Masons, Independent Union of Canada, Local 1 v. Ontario Labour Relations Board — decision released May 18, 1977— unreported) nor do we think the Board should readily exercise its discretion to add them, simply because they may have a commercial interest in the outcome of the proceeding. If strangers to the agreement were entitled to participate, the speed and economy which section 112a was designed to achieve would be seriously undermined, and the procedure needlessly complicated by the interven­tion of parties who are neither directly affected, nor bound by the legal result. Of course, nothing prevents an immediate party to a collective agreement from adducing legally admis­sible evidence of other bargaining relationships where such evidence would be helpful in re­solving an ambiguity in the collective agreement in question. Moreover, the existence of an ongoing, quasi-contractual proceeding under section 112a does not prevent a third party from asserting statutory rights available under other sections (for example, section 81 re­specting jurisdictional disputes, section 135 respecting sectoral determinations). In appro­priate circumstances the Board may consolidate such proceedings with the 112a proceeding or adjourn the 112a proceeding until more general questions have been resolved. (See, for example: Napev Construction Ltd., Board File No. 0534-79-M, decision released Sept. 17, 1979— as yet unreported.) In our view these avenues are sufficient to protect third party in­terests and it is unnecessary to encumber a section 1 12a proceeding with numerous interven­ers in the same interest as the parties already before the Board. There may well be circum­stances in which a section 112a proceeding raises questions of general interest to the industrial relations community and in those cases the Board might well wish to entertain amicus curiae submissions; however we are not satisfied that such circumstances exist in the present case. Accordingly, the Board is satisfied that it is unnecessary to adjourn to give no­tice to other parties and the Registrar is, therefore, directed to relist the matter for a contin­uation of the hearing on the merits.